Application by Co-operative Bulk Handing Limited T/A CBH Group Summary

[2024] FWCA 1624

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.218A - application to vary an agreement to correct or amend errors, defects or irregularities

Application by Co-operative Bulk Handing Limited T/A CBH Group

(AG2024/1127)

Grain handling industry
DEPUTY PRESIDENT BINET	PERTH, 2 MAY 2024

Application for variation of the CBH Kwinana Zone Maintenance Union Collective Agreement 2023

On 8 April 2024, Co-operative Bulk Handing Limited trading as CBH Group (CBH) filed an application (Application) pursuant to section 218A of the Fair Work Act 2009 (Cth) (FW Act) with the Fair Work Commission (FWC). The Application sought that the FWC order that clause 17.2.15 of the CBH Kwinana Zone Maintenance Union Collective Agreement 2023 (Agreement) be varied to correct or amend errors, defects or irregularities.

The parties to the Agreement are CBH and the trades and maintenance employees engaged by CBH within the Kwinana Zone (Employees).

The Agreement was negotiated with CBH on behalf of the Employees by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and the Australian Manufacturing Workers’ Union (AMWU). The CEPU and the AMWU (together the Unions) are covered by the Agreement.

The Agreement was approved by Commissioner Yilmaz on 30 January 2024.and commenced operation on 6 February 2024 and has a nominal expiry date of 24 March 2026.

The Unions consent to the Application.

Consideration

Section 218A of the Act provides the following:

“s.218A Variation of enterprise agreements to correct or amend errors, defects or irregularities

The FWC may vary an enterprise agreement to correct or amend an obvious error, defect or irregularity (whether in substance or form).

The FWC may vary an enterprise agreement under subsection (1):

(a) on its own initiative; or

(b) on application by any of the following:

one or more of the employers covered by the agreement;
(i)an employee covered by the agreement;

(iii) an employee organisation covered by the agreement.

If the FWC varies an enterprise agreement under subsection (1), the variation operates from the day specified in the decision to vary the agreement.”

CBH is an employer covered by the Agreement and therefore has standing to make the Application under s 218A(2)(b)(i) of the FW Act.

The discretion to vary an agreement may only be exercised if the FWC is satisfied that an obvious error, defects or irregularity exists (whether in substance or form). The terms errors, defects or irregularities are not synonymous terms.

The process of identifying errors, defects or irregularities involves making an objective assessment of the words used in the provisions under examination. The words used must be construed having regard to their context.[1]

Clause 17.2.15 of the Agreement includes a table which clearly erroneously lists the rate of 42% of the Day Shift Rate of a Tradesperson Level 1 as $55.94, and the Time and a Half Rate as $83.92. CBH, with the support of the Unions, state that the 42% of the Day Shift Rate should be amended to $23.50 and the Time and a Half Rate should be amended to $35.24 to correct a calculation error in drafting.

In exercising the discretion to vary an agreement, the FWC should have regard to the mutual intention of the parties at the time the agreement was made.[2] The task is to place the parties in the position they intended by their agreement – insofar as the wording of the agreement does not reﬂect that intention. [3]

The task of identifying the objectively ascertained mutual intention of the parties does not depend on evidence of what each party says they intended. It is a more confined task.[4]

Although a significant factor, the objectively ascertained mutual intention of the parties is not the only consideration. However, it would be unusual for other considerations to weigh in favour of a variation that was inconsistent with the intention of the parties.[5]

The exercise of the discretion conferred on the FWC to vary an agreement which contains errors, defects, irregularities does not give rise to a general discretion to determine the matter based on industrial fairness.[6]

Having regard to the mutual intention of the parties as reflected in their joint support for the Application I am satisfied that amending clause 17.2.15 will amend an error and will place the parties in the position they intended by their agreement.

An order[7] to this effect will issue with this decision.

DEPUTY PRESIDENT

[1] [2019] FWCA 979 at [11].

[2] Application by Bradnam’s Windows and Doors Pty Ltd [2019] FWCA 979 at [11], Re Australian and International Pilots Association[2007] AIRC 303 at [17].

[3] Ibid.

[4] Australian and International Pilots Association [2007] AIRC 303 at [18].

[5] Australian and International Pilots Association [2007] AIRC 303 at [17].

[6] Ibid.

[7] PR774452.

Printed by authority of the Commonwealth Government Printer

<AE523334, PR774451>

Co-operative Bulk Handling Limited, trading as CBH Group, applied to the Fair Work Commission (FWC) to vary a clause in the CBH Kwinana Zone Maintenance Union Collective Agreement 2023, which governs the terms and conditions of employment for trades and maintenance employees within the Kwinana Zone. The application, filed under section 218A of the Fair Work Act 2009, sought to correct calculation errors in the listed rates for a Tradesperson Level 1's Day Shift Rate and Time and a Half Rate. Both the employer and the unions involved in negotiating the agreement supported the application to correct these errors. The Fair Work Commission needed to determine whether the errors constituted obvious defects or irregularities warranting a variation of the agreement and whether such a variation would align with the mutual intentions of the parties as reflected in the agreement. The Commission concluded that the proposed corrections would indeed rectify the errors and would restore the agreement to reflect the original intentions of the parties, as evidenced by their joint support for the application. Therefore, the FWC exercised its discretion to vary the agreement in accordance with the parties' mutual intention.

The legal issues central to the decision involved interpreting the scope of the FWC's discretion to vary enterprise agreements under section 218A of the Fair Work Act 2009 to correct obvious errors, defects, or irregularities. The key considerations included whether the identified errors in the agreement constituted obvious defects or irregularities, whether these errors could be rectified without altering the fundamental intentions of the parties, and whether such a variation would appropriately reflect the mutual intentions of the parties as they existed at the time of agreement. The Deputy President noted that while the objectively ascertained mutual intention of the parties was a significant factor, it was not the sole consideration in determining whether to vary the agreement. However, it would be unusual for other considerations to outweigh the mutual intention of the parties. The Deputy President also emphasized that the exercise of this discretion does not permit a general determination based on industrial fairness but must remain focused on correcting errors to align with the original intentions of the parties.

Upon reviewing the evidence and arguments presented, the Deputy President found that the errors in the rates listed in clause 17.2.15 of the Agreement were indeed obvious and that correcting them would not alter the fundamental intentions of the parties. The Deputy President was satisfied that the proposed amendments to the rates would restore the agreement to its intended form, as supported by the mutual consent of both the employer and the unions. The Deputy President thus exercised the FWC's discretion to vary the agreement to correct these errors. An order was made to this effect, ensuring that the corrected rates would be implemented in the agreement.

In light of the above, the Fair Work Commission ordered that clause 17.2.15 of the CBH Kwinana Zone Maintenance Union Collective Agreement 2023 be varied to correct the calculation errors in the listed rates for a Tradesperson Level 1's Day Shift Rate and Time and a Half Rate. The Deputy President's decision ensures that the agreement now accurately reflects the mutual intentions of the parties, as evidenced by their joint support for the application to correct these errors. The variation operates from the date specified in the decision, ensuring that the corrected rates are implemented as intended by the parties.

Application by Co-operative Bulk Handing Limited T/A CBH Group

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established